Balkan Renewable Energy Program (BREP) Comprehensive Approach to Unlock Renewable Energy in the Balkans Nebojsa Arsenijevic, BREP Manager 1
IFC World Bank Group IBRD International Bank for Reconstruction and Development IDA International Development Association IFC International Finance Corporation MIGA Multilateral Investment and Guarantee Agency Est. 1945 Est. 1960 Est. 1956 Est. 1988 Role: To promote institutional, legal and regulatory reform To promote institutional, legal and regulatory reform To promote private sector development To reduce political investment risk Clients: Products: Governments of member countries with per capita income between $1,025 and $6,055. - Technical assistance - Loans - Policy Advice Governments of poorest countries with per capita income of less than $1,025 - Technical assistance - Interest Free Loans - Policy Advice Private companies in 184 member countries - Equity/Quasi-Equity - Long-term Loans - Risk Management - Advisory Services Foreign investors in member countries - Political Risk Insurance Shared Mission: To Promote Economic Development and Reduce Poverty 2
IFC Internal Structure Advisory Services (AS) IFC Provides Advice, Including to: Businesses Public-Private Partnerships Supporting the Private Sector Investment Services (IS) IFC Investing Solutions Include: Loans Syndicated Loans Equity Finance Structured Finance Risk Management Products Local Currency Financing Private Equity & Invest. Funds Trade Finance 3
Balkan Renewable Energy Program Component C1 C2 ALB Activities Regulatory framework improvements BREP Countries Support to renewable energy sponsors ( and company level) C3 Support to financial institutions ( and bank level) BIH Albania* Bosnia and Herzegovina* MAC Macedonia** MNE Montenegro*** KOS SRB Kosovo*** Serbia*** MDA Moldova*** (limited scope) ( BIH IDA-Blend; KOS, MDA IDA ) * Started FY10; ** Started FY12; *** Started FY13 4
C1. Investment Climate - Approach Investment Climate Targets Align national regulation with EU; Fulfill obligations in accordance to EC Treaty of SEE; Design appropriate incentive mechanisms; Increase transparency of concessions granting procedure (credibility); Design investment promotion tools and mechanisms for SHPPs; Increase bankability of projects and decrease collateral requirements; Make predictable cash flow analysis and conditions for project financing. 5
C1. Investment Climate Results Signed agreements with all 6 countries Including ongoing work in KOS, MAC, MNE more than 50 LD delivered Capacity building of public institutions Country Legal Document Enacted SRB Decree on Feed-in Tariffs Decree on Privileged Status Decree on End-User Fee Calculation Preliminary PPA PPA for producers above 5MW PPA for producers bellow 5MW Jan, 2013 Jun, 2013 ALB Law on Renewable Energy May, 2013 BIH (RS) Law on Renewable Energy and Efficient Cogeneration Law on Concessions May, 2013 Jun, 2013 BIH (FBIH) Law on Renewable Energy and Efficient Cogeneration Sep, 2013 6
C2. Support to Private Sector - Approach Level Interventions B2B workshops, Support to Associations, Knowledge sharing Promotion of new technologies Designs cross-check, Business plan preparation, E&S assessment CDM projects registration Company Level Interventions 7
C2. Support to Private Sector - Results Country Project/Service Description Type ALB B2B Linking international and local SHPP companies Registration of Programmatic CDM for SHPPs Revision of Feasibility study for 7 SHPPs Company Company BIH Support in SHPP tender preparation Revision of feasibility studies of SHPP system Revision of concept design of SHPP system Company Company MAC Pre-feasibility study preparation for biomass plant Company SRB Analysis of biogas plants costs and incomes in Serbia study and finance model for Pump-Storage HPP Company 8
C3. Support to Banks - Approach Level Interventions Training material development Integration of Regulatory/ Budgeting/ Engineering and Risk in the Finance Manual Country Level Workshops Bank Level Interventions In-depth Training for SHPPs and PF Support in First SHPP Assessment Portfolio Analysis and Recommendation ( in the second year) 9
C3. Support to Banks - Results Training material development Technical Manual (all relevant aspects of SHPP project assessment A. Engineering Manual B. Legal Manual C. Budgeting Manual D. Risk Manual Finance Manual ( consolidate the 5 areas of expertise) Cnt Project/Service Type ALB BIH Country level workshop Support Credins Bank Support Intesa Bank Country level workshop Support UniCredit Mstr Support UniCredit BL KOS Country level workshop MAC Country level workshop MNE Country level workshop Bank Bank Bank Bank SRB Country level workshop SHPP Cash Flow Tool (Finance Modeling) 10
Conclusions Multi-Sectoral Approach: regulation, private sector, financial institutions, local community, NGOs Taking care about regional/national specific framework and needs Alignment of Key International Players Affordability: offered solution shall not be too expensive Long Term Sustainability: energy (infrastructure) projects assume long term operation Pilot Projects / Massive Implementation: Pilot projects are good but only if it is possible to replicate under same conditions. Include Local Economy as much as possible: sometimes is hard to promote RE if all products and services are coming from abroad. Global warming is very important but put equal attention to reduction of local pollution. 11